Extensions of term of pharmaceutical patents

by Shyama Jayaswal

The Australian Patents Act 1990 currently provides for the extension of term of certain pharmaceutical patents for a period of up to five years.

Requirements for grant of an extension of term

Extensions are available only for patents that disclose and claim a pharmaceutical substance per se or a pharmaceutical substance produced by a process that involves the use of recombinant DNA technology. Extensions are not available for method of treatment or process of manufacture patents.

The other requirements for obtaining an extension of term are as follows:

goods containing, or consisting of, the pharmaceutical substance must be included in the Australian Register of Therapeutic Goods (ARTG);

there must be a period of at least five years between the date of the patent and the first Australian regulatory approval; and

the patent term must not have been previously extended.

The term of the extension is calculated as the period from the date of the patent until first Australian regulatory approval reduced by five years. The maximum term of extension is five years.

The rights of the patentee if a term is extended

During the term of the patent after an extension of term has been granted (including during the initial 20 year term), it will not be an infringement if a person exploits the claimed pharmaceutical substance solely for purposes in connection with obtaining regulatory approval for therapeutic use in Australia or any foreign country (springboarding).

During the term of the extended period a patent will not be infringed if:

a person exploits the claimed pharmaceutical substance for a purpose other than for a therapeutic use; or

a person exploiting any form of the invention other than a pharmaceutical substance per se.

Although a patent is extended on the basis of a pharmaceutical substance having Australian regulatory approval, the extended patent covers any other claimed pharmaceutical substance.

Recent cases regarding the current provisions

The Australian Federal Court considered the scope of what is a pharmaceutical substance per se in:

the court held that only patents that claim new and inventive products alone (that is, the active pharmaceutical ingredient) can be extended (although certain claims to a mixture of substances may be entitled to an extension). Claims to a known product produced by a new process or a known product used in a new method of treatment cannot be extended.

held, following opposition proceedings, that either the pharmaceutical substance claimed was not included in the ARTG, or the pharmaceutical substance actually on the ARTG did not fall within the scope of the claims. The application for an extension of time was therefore refused.

The review by the Federal Government

The current system that provides for extensions of term for pharmaceutical patents is a balance between the needs of innovator pharmaceutical companies, which should be compensated for the cost of developing new pharmaceutical substances, and the needs of companies producing pharmaceuticals who provide the market with lower cost, generic products.

The Federal Government has recently issued a discussion paper reviewing the current regime in Australia in light of systems in other major markets. Suggestions that are being considered include:

making Australian extended patents expire no later than they do in Europe, Canada and the USA;

allowing manufacture of the pharmaceutical substance for export during the term of the extended period; and

allowing springboarding at any time during the term of any pharmaceutically-related patent.

Discussions between the Department of Industry, Tourism and Resources, stakeholders and industry were held in September and October 2002, with written submissions closing on 7 October 2002.

The Productivity Commission recently reviewed the role of the Pharmaceutical Industry Investment Program, which is due to expire in 2004. Based on the results of this research, (see chapter 8 of its draft report, dated December 2002) the Commission found that:

The current patent extension requirements, which were intended to protect brand manufacturing domestically, appear to impede inadvertently Australian exports of generic products, and favour foreign-based generic manufacturers.

Allowing generic manufacturers to export to countries where the patent had expired would not materially undermine patent protection in Australia.

The Productivity Commission concluded with a recommendation that the Patents Act be amended to allow manufacture for export in the extension period.

There have also been submissions made to the Interdepartmental Committee on Springboarding and Patent Extension which argue against any amendments. The final report of this committee is expected soon.

Possible outcomes from the review

The possible recommendations from the review committee are:

to maintain the status quo;

to amend the provisions in the Patents Act 1990 that calculate the length of the extension period;

to amend the provisions in the Patents Act 1990 to allow manufacture for export during the patent extension period;

to amend the provisions in the Patents Act 1990 to remove the current link between the springboarding provisions and the extension to term provisions; or

to amend the provisions in the Patents Act 1990 to expand the types of patents for which springboarding is allowed.